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Satisficing in sales competition: experimental evidence

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Author Info
Berninghaus, Siegfried K. () (Universität Karlsruhe)
Gueth, Werner () (Max Planck Institute for Research into Economic Systems, Strategic Interaction Group)
Levati, M. Vittoria () (Max Planck Institute of Economics, Strategic Interaction Group)
Qiu, Jianying (Max Planck Institute of Economics, Strategic Interaction Group)

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Abstract

In a duopoly market, aspirations express how much sellers want to earn given their expectations about the other's behavior. We define individually and mutually satisficing sales behavior for given individual beliefs and aspirations. In a first experimental phase, whenever satisficing is not possible, beliefs, aspirations, or sales have to be adapted. In a second phase, testing the absorption of satisficing, participants are free to select nonsatisficing sales profiles. The results reveal that most people are satisficers who, either mandatorily or deliberately, tend to adjust aspiration levels if they cannot be satisfied.

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Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number 07-03.

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Length: 29 pages
Date of creation: 16 May 2007
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Handle: RePEc:xrs:sfbmaa:07-03

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Werner Güth & Gerlinde Fellner & Ev Martin, 2006. "Satisficing or Optimizing? - An Experimental Study," Discussion Papers on Strategic Interaction 2006-11, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
  2. Huck, Steffen & Muller, Wieland & Normann, Hans-Theo, 2001. "Stackelberg Beats Cournot: On Collusion and Efficiency in Experimental Markets," Economic Journal, Royal Economic Society, vol. 111(474), pages 749-65, October. [Downloadable!] (restricted)
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  3. Holt, Charles A, 1985. "An Experimental Test of the Consistent-Conjectures Hypothesis," American Economic Review, American Economic Association, vol. 75(3), pages 314-25, June. [Downloadable!] (restricted)
  4. Simon, Herbert A, 1979. "Rational Decision Making in Business Organizations," American Economic Review, American Economic Association, vol. 69(4), pages 493-513, September. [Downloadable!] (restricted)
  5. Roy Radner, 1975. "A Behavioral Model of Cost Reduction," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 196-215, Spring. [Downloadable!] (restricted)
  6. Napel, Stefan, 2003. "Aspiration adaptation in the ultimatum minigame," Games and Economic Behavior, Elsevier, vol. 43(1), pages 86-106, April. [Downloadable!] (restricted)
  7. Youngse Kim, 1999. "Satisficing and optimality in 2þ2 common interest games," Economic Theory, Springer, vol. 13(2), pages 365-375. [Downloadable!] (restricted)
  8. Aumann, Robert & Brandenburger, Adam, 1995. "Epistemic Conditions for Nash Equilibrium," Econometrica, Econometric Society, vol. 63(5), pages 1161-80, September. [Downloadable!] (restricted)
  9. Werner Güth & M. Vittoria Levati & Matteo Ploner, 2006. "Is Satisficing Absorbable? - An Experimental Study," Discussion Papers on Strategic Interaction 2006-10, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
  10. Lilly, Gregory, 1994. "Bounded rationality : A Simon-like explication," Journal of Economic Dynamics and Control, Elsevier, vol. 18(1), pages 205-230, January. [Downloadable!] (restricted)
  11. Gerlinde Fellner & Werner Güth & Boris Maciejovsky, 2005. "Satisficing in Financial Decision Making A Theoretical and Experimental Attempt to Explore Bounded Rationality," Discussion Papers on Strategic Interaction 2005-23, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
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  1. Werner Güth, 2007. "A Non-Bayesian Approach to (Un)Bounded Rationality," Jena Economic Research Papers 2007-035, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek. [Downloadable!]
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